SmartSign, one of our growth equity portfolio companies, has been acquired by Sentinel Capital Partners, an exciting development for founder Blair Brewster, CEO Max Smith, and the entire team. We celebrate this milestone today and will continue to support the SmartSign team in their next phase of growth.
A B2B e-commerce player with a focus on regulatory, compliance, and safety applications, SmartSign is a leading online provider of customizable signs, labels, and tags. The company manufactures many of its own products and has served small and medium-sized businesses, governmental organizations, and 75 percent of the Fortune 1000 for more than 20 years.
Here are a few key observations from our time working with such a great team and platform.
Relationships Matter
We invested in SmartSign in 2019 but our relationship with founder Blair Brewster began in 2013 — six years before partnering with him! Relationships and trust take time to develop. At Norwest, our growth team focuses and thrives on working with founder-owned companies, and we believe that our partnerships mimic an iceberg: the post-investment partnership that the public sees is only the tip. Under the surface there often is a relationship that has been cultivated over years.
The decisions we’ve made with SmartSign over the past three years – bringing in new leadership, acquiring companies, navigating COVID-19 – to us are as fundamentally grounded in trust as they are in the merits and considerations of the choice. And we are proud to have developed such a relationship with Blair, Max, and team.
Durable Market and Value Proposition in Regulatory Compliance
SmartSign has grown for 22 straight years; the team has executed incredibly well throughout. Two forces have helped propel the company through recessions and recently, a pandemic.
Regulations constantly change and with them so do signage and label needs. In an ever-evolving world, new signs are needed for developments such as all-gender bathrooms, electric vehicle parking, and social distancing. Episodic changes add only short-term demand to an ever-changing regulatory environment, but governmental bodies from OSHA down to a local municipality must have the signs and labels required to comply with all of the changes. SmartSign, along with its vendor partners, develops hundreds of new products a year to serve these evolving needs, and the customization engines allow customers to tailor messaging even further.
Compliance-minded spend is persistent. SmartSign, similar to the rest of our compliance-minded assets AbsenseSoft, Avetta, Cority, and Supplier.IO, taps more inflexible budgets within an enterprise. That model enabled Blair and team to grow during the Great Recession and to navigate the COVID-19 pandemic admirably.
Verticalized E-Commerce Advantages
SmartSign sells signs, labels, and tags into a competitive, developed market. While entrenched manufacturers, distributors, and sales organizations offer plenty of competition, SmartSign’s verticalized approach delivers lasting value.
Although headquartered in Brooklyn, NY, SmartSign is a global platform. A long-standing, incredibly productive office in Jaipur, India supports development and marketing needs, while products are manufactured by SmartSign-owned facilities across four U.S. states. The network drives comparative value at each stage of the marketing, production, and distribution process.
B2B E-Commerce Opportunities
Norwest has gained tremendous insights into B2B e-commerce through our multi-year partnership with SmartSign, and we anticipate continued growth in the sector. According to Digital Commerce 360, in 2021, online sales on B2B e-commerce sites, log-in portals, and marketplaces increased 17.8% to $1.63 trillion. Statista data suggests that the North American B2B e-commerce market will surpass $4.6 trillion by 2025. We will continue to explore other verticals with similar growth trends and recession resilience.
We have thoroughly enjoyed our partnership with Blair, Max, and team to date, and look forward to supporting them along with Sentinel in the years to come. We expect the four tenants above to drive lasting value.
